Chinatrust acquires land from Taiwan Fertilizer at auction

Chinatrust Commercial Bank (中國信託商銀), the nation's largest credit card issuer, yesterday acquired the use of a parcel of land in Taipei for 50 years from Taiwan Fertilizer Co (台肥) in a public auction.

As the only bidder yesterday, Chinatrust Commercial agreed to pay 50-year royalties of NT$3.36 billion (US$106.2 million) including value-added taxes.

The land measures 3 hectares and is located in Taipei's Nangang District, according to the bank's press release. The floor price was set at NT$3.17 billion.

The bank will also have to pay eight percent of the government-declared land price per year, at between NT$70 million and NT$80 million. This makes the total transaction value more than NT$7 billion, the bank said.

Chinatrust Commercial said it has its eyes on good transport links, as the the Nangang and Neihu MRT lines, both under construction, will converge in the district. The district is also home to a high-speed railway station and is situated between two national highways. The bank plans to construct office buildings on the site to accommodate its business expansion, according to the press release.

Tony Chao (趙正義), managing director of Jones Lang LaSalle Taiwan, said the deal was fairly reasonable considering the potential and development opportunities in the district.

"Now the urban developments are moving toward the east and we're very optimistic about this area. It is highly likely that Nangang will turn into another bustling Xinyi district," he said during a phone interview.

The government has been working to develop the Nangang Software Park (南港軟體園區), and the first and second phases have been completed with more than 10,000 employees currently working in the park.

The parcel of land owned by Taiwan Fertilizer has been under the spotlight recently after its former chairman Fan Chen-tsung (范振宗) alleged that Teco Group (東元集團) tried to force the company to rent the land for a lower price of NT$2.7 billion for 50 years by leveraging high-level influence.

As expected, Teco did not dispatch representatives to the bidding yesterday.

Taiwan Fertilizer has more than 600 plots of land totaling 177 hectares to dispose of, said Michael Huang, general manager of the real estate development division.